Presenting his new book in Brussels on 20 April ('Energy and climate change: Europe at the crossroads'), Buchan said EU climate change policy was having a profound effect on European integration.
"Climate change policy is quite a dramatic change from an integrationist viewpoint […] On the issue of carbon pricing, it is only at the European level. And then of course, there is all the subsequent legislation and regulation that follows on from this, such as regulations about cars, about better efficiency in buildings, about the inclusion of aviation emissions into the ETS - and probably shipping later on - etc."
"So, from a political point of view, it seems to me that this has a very strong integrationist effect."
However, he warns that there are trade-offs between the EU's energy policy objectives of securing energy supplies and ensuring competition on the market, and longer-term environment issues, like climate change.
Free markets 'completely out of date'
Buchan believes there is now a realisation, especially in the UK, that climate change and free energy markets are not compatible.
"It has been a problem for the British, but I think they are now accepting - I think everyone now is having to accept - that climate change means that there will be more interference in the market, that there will be more non-market mechanisms, as they say – targets, quotas, etc."
"And so if you're still a free market ideologue, you'd say 'this is a terrible trade-off', that it's ruining markets. But I think the free market for energy is made completely out of date by the climate change necessities."
However, Buchan is sceptical that maintaining large 'energy champions', such as EDF in France or E.ON in Germany, makes economic sense.
"From an economic point of view, I don't think there are great economies of scale in having enormous companies. Companies operating efficiently don't have to be that big," he said.
British 'laissez-faire' approach 'not particularly sound'
But he did recognise the value of keeping them for energy-security reasons. "Obviously, if you're EDF in France and you're building nuclear power stations, it helps to be a big company with a big balance sheet and with the state as a principle shareholder."
By contrast, he said, "Britain doesn't seem to care whether it has an energy champion or not". But he seemed to wonder whether the UK had not made a mistake by leaving its energy sector at the mercy of market forces.
"As I describe in the book, there has been a sort of 'laissez-acheter' attitude by the British. Anyone can come in and buy anything as long as they pay a good price for it. As a Brit, I don't feel particularly comfortable with that."
"I don't think it is particularly sound."
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